Steve Jobs

Valentine, however, did not become a preeminent Silicon Valley investor by relying on surface appearances. What bothered him more was that Jobs knew nothing about marketing and seemed content to peddle his product to individual stores one by one. “If you want me to finance you,” Valentine told him, “you need to have one person as a partner who understands marketing and distribution and can write a business plan.” Jobs tended to be either bristly or solicitous when older people offered him advice. With Valentine he was the latter. “Send me three suggestions,” he replied. Valentine did, Jobs met them, and he clicked with one of them, a man named Mike Markkula, who would end up playing a critical role at Apple for the next two decades.

Markkula was only thirty-three, but he had already retired after working at Fairchild and then Intel, where he made millions on his stock options when the chip maker went public. He was a cautious and shrewd man, with the precise moves of someone who had been a gymnast in high school, and he excelled at figuring out pricing strategies, distribution networks, marketing, and finance. Despite being slightly reserved, he had a flashy side when it came to enjoying his newly minted wealth. He built himself a house in Lake Tahoe and later an outsize mansion in the hills of Woodside. When he showed up for his first meeting at Jobs’s garage, he was driving not a dark Mercedes like Valentine, but a highly polished gold Corvette convertible. “When I arrived at the garage, Woz was at the workbench and immediately began showing off the Apple II,” Markkula recalled. “I looked past the fact that both guys needed a haircut and was amazed by what I saw on that workbench. You can always get a haircut.”

Jobs immediately liked Markkula. “He was short and he had been passed over for the top marketing job at Intel, which I suspect made him want to prove himself.” He also struck Jobs as decent and fair. “You could tell that if he could screw you, he wouldn’t. He had a real moral sense to him.” Wozniak was equally impressed. “I thought he was the nicest person ever,” he recalled. “Better still, he actually liked what we had!”

Markkula proposed to Jobs that they write a business plan together. “If it comes out well, I’ll invest,” Markkula said, “and if not, you’ve got a few weeks of my time for free.” Jobs began going to Markkula’s house in the evenings, kicking around projections and talking through the night. “We made a lot of assumptions, such as about how many houses would have a personal computer, and there were nights we were up until 4 a.m.,” Jobs recalled. Markkula ended up writing most of the plan. “Steve would say, ‘I will bring you this section next time,’ but he usually didn’t deliver on time, so I ended up doing it.”

Markkula’s plan envisioned ways of getting beyond the hobbyist market. “He talked about introducing the computer to regular people in regular homes, doing things like keeping track of your favorite recipes or balancing your checkbook,” Wozniak recalled. Markkula made a wild prediction: “We’re going to be a Fortune 500 company in two years,” he said. “This is the start of an industry. It happens once in a decade.” It would take Apple seven years to break into the Fortune 500, but the spirit of Markkula’s prediction turned out to be true.

Markkula offered to guarantee a line of credit of up to $250,000 in return for being made a one-third equity participant. Apple would incorporate, and he along with Jobs and Wozniak would each own 26% of the stock. The rest would be reserved to attract future investors. The three met in the cabana by Markkula’s swimming pool and sealed the deal. “I thought it was unlikely that Mike would ever see that $250,000 again, and I was impressed that he was willing to risk it,” Jobs recalled.

Now it was necessary to convince Wozniak to come on board full-time. “Why can’t I keep doing this on the side and just have HP as my secure job for life?” he asked. Markkula said that wouldn’t work, and he gave Wozniak a deadline of a few days to decide. “I felt very insecure in starting a company where I would be expected to push people around and control what they did,” Wozniak recalled. “I’d decided long ago that I would never become someone authoritative.” So he went to Markkula’s cabana and announced that he was not leaving HP.